Coupling to-go or delivery with online or mobile app ordering opens up an entirely new area of restaurant marketing.
The Goldman Sachs 2017 restaurant sector outlook paints a grim picture for the category. According to their statement, the category headwinds are driven primarily by a decrease in consumer discretionary cash flow from 4.4% to 3.9%. Rising and uncertain healthcare costs, as well as rising energy costs, mean that the typical American diner will have fewer occasions to dine out and will end up spending less because they simply have less to spend.
The full-service chains seem to be most at risk due to the combination of rising minimum wages, potentially higher food costs resulting from reductions in free trade and the decrease of consumer discretionary cash. This has the potential to create a perfect storm for the category.
But how can a full-service chain weather all of those challenges and succeed in 2017? Assuming your operations are running efficiently, you should focus on building a robust to-go or delivery business.
Why does a delivery or to-go business help? First, it helps because you can increase your trade area without investing heavily in additional locations and infrastructure. Second, you will be more convenient for customers who feel like they are saving money by dining at home. Third, to-go and delivery orders are measurably higher than comparable in-restaurant checks.
Finally, coupling to-go or delivery with online or mobile app ordering opens up an entirely new area of restaurant marketing. No longer is success measured in just in-restaurant benefits. Now, it’s about true customer convenience.
There are certainly considerations associated with these capabilities such as delivery driver insurance, ensuring food travel, customization of orders, etc. However, given the substantial headwinds outlined above, the upside is well worth the investment and could be what puts full-service chains in a position to win against fast food.
Sean Baker has 18+ years marketing the restaurant industry. He is the President/ Partner at IMM, a digital ad agency located in Boulder, CO.